Created: 10/1/1991

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Central Intelligence

Iran Under Rafsanjani:ew Role in the World Community?

as used in ihepreparatw of this National inwigance bSumate.

Th* toeovving we*gerKe org^ievor^ pe^rk^aied

ha psapa&tron of this Estimate

DM Central inteftcetce Agency

The Oefeise Jr-retf-genee Agency

The Netonal Security Agency

The Bueau cf intelligence ana Reses/ch.

Department of Scare

The Office of Intelligence Support,

Department cf the Treasury

The Director for intelligence.

Department of Energy

also oeetic&atiftg:

The Office cf PN) Oeoory CNef of Sta* fw inefcgence

of me Ar-ry

The Director cf Navai 'nteiftgerce.

Department of me Navy

The Assistant Chief of Staff. Intelligence,

Department of the Air Farce

"he Director of inteif'gerce.

Headquarters. Marine Corps

Tfus Estimate waseyi D, the National Eoratgn intelligence Board

Key Judgments

Iran Under Rafsanjani:ew Role in the WorldT

President Rafsanjani's initiative to improve Iran's standing with the world community will continue to be at lease partly successful over the next two yean. We see further gains for Iran in terms of rebuilding financial and political ties in the Gulf and in Western Europe. Such successes may help Rafsanjani satisfy, at least in the near term, domestic demands for an improved standard of living, which drive bis foreign policy. Continued promotion of militant Islam, ties to terrorist groups, and resistance even from within the ruling circle will cause occasional setbacks to Rafsanjani's foreign policy initiatives. At the same time, Iran will continue spending on its rearmament program, including researchevelopment on.weapons of mass destruction, as part of its efforts to reconstruct its strategic military position in the

Rafsanjani's goalsis the United States are to reduce bilateral tensions and US economic and political pressures on Iran and to limit US military presence and political influence in the Persian Gulf. Rafsanjani would like to resoive issues such as hostages, economic and armsand to eliminate US pressure in international forums over terrorism and human rights issues. On hostages, we believe Rafsanjani feels little time pressure to soWe the problem immediately, but wc do think he intends to free all those under Iranian control- Overall, Iran will continue to be wary of the United States. Ideology and strategic considerations will dictate continued friction between IranianS interests]

Domestic. During the next two years of his presidential term, Rafsanjani will prevent his radical opposition from derailing his pragmatic foreign and domestic policies. Rafsanjani and Supreme Leader Khamenei wan; toonfrontation with their opponents to preserve the unity of the clerical and political establishments. Nonetheless, Iran's leadership is politicallythan when it first assumed officeafsanjani and Khamenei will resort to "hardball" political tactics and even coercion when necessary.

In the Middle East and Southwest Asia. Iran still seeks recognitionegional power. During the time frame of this Estimate, Iran willrimarily diplomatic strategy to assert its regional influence, particularly with Gulf Cooperation Council (GCC) sutes. where it will also seek, probably unsuccessfully in the short run, new security reSaiionships. Iran will seek to shape postwar relations in the Gulf in ways that emphasize Iranian leadership, isolate Iraq, prevent the rcemergence of an Arab bloc directed against Iran, and limit the role of the United States in regionalTehran will continue its efforts to take advantage of Iraqis postwar weakness and the declining Sovie; involvement tn Afghanistan, j

>iy will ico

Iran will try tonfluence among Muslims in the USSR, but wc believe that Iran is disadvantaged in this effort as compared wiih Turkey and Saudi Arabia. Modern nationalists in the Soviet Muslim republics are likely to be more attracted to Turkey's secular, democratic system, while most traditional Sunni Muslims probably will look more favorably on the more


Key Judgments _Djscussion


The Internal Situation: Iran's Slnw ReIurnNf,rm,irv

Decline of the Radicals

Role Qf [he

Isthe Revolution Over?


Home; Revolutionary Rhetoric Greater Pragmatism Abroad: Nationalism and Khomeini's Legacy

Iran's Foreign Policy Guiding Principles

Persian Gulf

Non-Gulf Arabs

lanistan: The Northern Tnt 14

Relations With.

Reaching Out to the European Community. Japan, and Chin,"

Iran and the Soviet Union; Uncertain Future Jraii_and the United States: Dealine With th*


The Internal Situation: Iran'* to Normalcy

Decline of the Radicals

Iran has been gradually turning away from the revolutionary excesses of the past decade ind has been moving toward more convcnticrjl behavior. The work of consolidating the clerical regime and Islam's role in public life is largely accomplished; Tehran ismore concerned with worldly issues such as promoting economic growth. This transition, in part, reflects the natural maturing of the revolution and the exhaustion of political fervor after moreecade of revolution aad war. il alsoeliberate effort by tbe regime to address pressise nationalproblems and increase its own power.-?

We expect this transition toperhaps even to accelerate especially after the Majlesthe next two yean, although the clerical regime will retain much of the outlook and rhetoric of the revolution. The pattern of Iranian politicalfcr the next several years is likely to exhibit three dominant trends

Nonetheless, Iran retains great potential to bepower because of iu sue, its resourcelocation, and its ability to disrupt Westernthe Gulfs oil supplies. We also believe thatto recapture its influence and power in

the region and to redefine its role in Central Alia in light of changes in the Soviet Union and Afghanistan. While some recent changes provide opportumt'ei fcr Iran, its leadership must also .'eel challenged by the improved US position in :he Arae world and by the apparentiend of superpower rivalry' in (be Third WorldJ

A policymphasuing pragmatism over tdtotogicolpurity. Rafsanianitrcrg nationalist motivated primarily by considerations of national and personaleres I. In his lirst Friday sermon following bis assumption of the presidency,set tbe tone of bis administration by maintaining (hatetter standard of livingoal of Islam,theme (bat contrasts with Khomeini's frequent emphasis on self-denial and admonitions against consumerism.

The regulariratton of goverimrru functions.and Khamenei will continue to strengthen formal government institutions at the expense of quasi-governmental revolutionary organs. Thehas subordinated to the Defense Ministry the



Rafsanjani'scritics in the Islamic Consultative Assemblyadical student orgs nidations, and newspapers controlled byadvocate strict adherence to hardline views theyio Khomeini. They support state conirol of the economy, rigorous enforcement of revolutionaryagainst the wealthy or Western-orientedan uncompromisingly con-frontationa! poucy against the West in general and tbe United States in particular. Their calls forrevQimiocary purity, self-sacrifice, and continued confrontation with the Westincreasingly fall on weary and unrecepiive ears^

The general population is tired of war and revolution and preoccapied with iu declining standard of living. The armed forces, including the IRGC were greatly weakened by tbei; with Irac, and arc unlikely to intervene in favor of the extremists.ajor ecor.omic collapse for which Rafsanjani is biamcd. his opponent* will no: be able to mobilize significant ^opular or military support for their radical ajenda.

Rafsanjani is continuing to hone his alreadyskills at manipulating and neutralizing theAlong with Khamenei, Rafsanjani willtoix of cc-optation. persuasion, and coercion to divide their adversaries and exclude ihem

from important government" posts xtiey almostwill use whatever tactics necessary io ensurero-Rafsanjani majority will be elected to the Majles in the next elec;ion scheduled forafsan;am and Khamenei would prefer toonfrontation with ihe radicals and may allow jome prominent hardliners to retain their seats, thusa safety valve for them to express their views. If. however, the radicals remain unsatisfied and resor: to demonstrations, sedition, and acts of politicalthe leadership would, net hesitate to usetactics against

The Role or ibeTightrope Act

Political turmoil, the war witheclining oil earnings, and general economicave taken their toll on Iran's* economy. Social problems, especially the severe brain drain following tbe revolution and unprecedentedgrowth, have resulted In additional drags on the economy. These pressures have led Rafsanjani to look increasingly to the West for help. He is trying to attract new arrestment and obtain tbe criticalexpertise for development programs as well as loans to ease the country's financial burdens. He has achieved tome modest gains: Tehran has signed new contracts wiib Western companies, particularly in the oil. gas. aad related industries, although othermay wait for the outcome of the Majles election in2 before committing significant resources to Iran's economy. Rafsanjaoi has also beguna number of economic liberalizationat the behest of the InternattonaiFund (IMF) and the Worldrevive the economy and regain investor confidence. Hisinclude unifying tbe multiple eichange rates and devaluing the rial,umber of state-run companies, and rernoving subsidies on most basic commodities. Rafsanjani also directed an almost JO-perceni expansion in government expenditures,for domesticthan doubling its

external debt toillion, according topressbreathe life into Iran's industrial sector, expand nonoil exports, and meet pent-upfor consumer goods.

irttoos. and ;

We believe Rafsanjani will push ahead with his reform program; if he fully implements those reforms begun in the0 billion five-year pian and if oil prices do not decline, Iran could achieve modest growth over the medium term, following the economic recovery begunonetheless, Improvements in both the underlying structural problems and in HvinE conditions for the average Iranian will be hard to achieve in the next two years. Higher earnings from Oil Sales would allow Iran to increase imports and push forward on some reconstruction projects but would not address the dependence of the domestic economy on oil and the price and exchange rate'nd they would not stimulate domestic savins

Economic problems are unlikely to threaten Rafsan-jam's position ever the next two years. His opponents have not effectively exploited economic issues; most Iranians probably view his economic reform package as preferable to the hardliners' calls far continued revolutionary ausieriiy. Domestic unrest over high prices, removal of subsidies, and housing shortages appear to be local and largely spontaneous outbursts that the regime can handle. Iran is also seeking IMF help inafety net, which would help buffer the poor from some of the adverse effects of reform. For the present, wc believe lhat the political exhaustion of Iraniansecade of revolution and war, the regime's ability to suppress dissent, and the absenceiable alternative leadership to th: clerics will limit the threat posed to Rafsanjani from public dissatisfaction over living conditiornjj*^

Is ihe Roolution Over?

AC Home: Reiolufionary Rhetoric, Greater Pragmatism

Rafsanjani and Khamenei will not abandon the basic values ofevolution: the reassertion of Islamentral characteristic of the Iranianand Iranian policy, direct clerical participation in

IfRafsanjani Left ihe Scent Abruptly

We believe that Rafsanjani's sudden departure from ihe scene would noi result in unrest, turmoil,ramatic change in the basic tenets of Iran's current economic and foreign policies. Supreme Leader Khamenei and other key regime officials are likely lo pursue similar policies, albeit probably more deliberately than with Rafsanjani at Ihe helm. Rafsanjani'sas Iran's foremost policy formulator.would undoubtedly be missed. Hardline elements might try to seize such an opportunity to regain some of iheir lost stature, bul their influence on Iranian decisionmaking has ebbedoint that we doubt they would be able toredible challenge lo any pragmatic candidate Khamenei^pported as ato

Under the provisions of9 revisedthe apolitical Yice President, Hasan Ebrahim Habibi, wouldareiakerafter receiving Supreme Leaderapproval. The Supreme Council for Nationalof the regime's toplikely become the main decisionmaking bodyew presidential election was held, at whichrominent regime figure close lo Khamenei, such ashead Ayalollah Mohammad Ali Yazdi, would likely be elected the new

politics, and, perhaps mostealous effort to defend Iranian independence from real or perceived foreign influence!

At the same time. Wc see ihe rce-crgencc ofpatterns of Iranian behavior and iheof revolutionary valuesore elasticfor Iranian policy. One characteristic is the growing concern with more worldly issues. Thisreflects the maturing of the revolution: it alio is

no serious rivals forclencs are noi likely to withdraw Quietly from politics. The emphasis on practical solutions, however, will open greater oc-poc. unities for laymenise to prominent positions in the government; this has already bees ooservecJ in Raisaojani's cabinet, although ihe governmentmost directly concerned with the security of theIntelligence Ministry and theboth headed by clerics. In addition, that portion of tbe clerical establishment thai supports Rafsanjani and Khamenei lends toore traditional, less activist outlook regarding clerical participation in government. This outlook mayan additional impulse to include more laymen in government.

Abroad: Nationalism and Khomeini's Ugacy

will be most

Iranian nationalism willtronger force in Irtfliaa foreign policy but will not replace- Islamaesac and rallying cry. Nationalisti be blended with Islamic ones,ore supple message. This fusion wjj) be most clearly expressed in Iranian foreign policy.'

forced on the regime by ihe seriousness of its economic plight and its international isolation. Re* porting from Tehran suggests that the revolutionary ardor of the Iranian public is cooling. For example, the public is more willing to lest Ihe tolerance of the regime for more liberal social expression: and,eturn to traditional Persian cultural norms, theappears to alternate between cycles of greater tolerance and more rigorous enforcement of Islamic norms- Any Iranianoneby advocates of continued revolutionarywould have to hewore pragmatic policy to address Iran's problems and retain the supportopulation struggling to cope wiih declining living standards and weary cf political crusades. One cfi's strengths is that he sensed this change sarly and positionedake advantage of il.

Iranian clergy will continue to dominate government decisionmaking lor at least the time frame of this Estimate and probably for many years beyond.struggled to obtain politicalhaving

The regime, however, still pays homage to Khomeini's legacy, and this will limit its abilitydopt more SeaMe potidesj"; ", *

Rafsanjani's general effort to adjpt revolu tic nary principles to practical ccrtsidsrations of state wjii lessen but not end Iran's support to militant Islamic groups acrsao. The advancement of revolutionary Islam underpins the legitimacy ot the clerical regime and Iran's self-perceived roic as (he "focal point of Islam" provides the mora! justification for its policies. Rafsanjani and Khamenei have, as in domestic policy, sought to emphasize those precedents of Khomeini's


allow them to redefine export of the revolutionay more compatible with the conduct of aforeign policy. Specifically, they have publicly argued that Iran will export the revolution "bythat is. byore perfect Islamic society in Iran that will inspire and encourage lims elsewhere to emulate the Islamic Republic!

in its per:

Iranian attempts to exploit Islamic politics will be opportunistic. Iran's Kirch for prestige as the leader of miiitaiit Islam will cause it to intrude in the interna! affairs of otaers oo at least rhetorical and diplomatic levels in many disputes in which they think Muslim rights are beinginstance, when it condemned French aad Turkish bans on tbe wearing of conservative Islamic clothing at state schools, or in its persistent calls for the independence of Kashmiri

Iranian material support foe Sunni as well as Shia fundamentalists will continue during the next two years, although Tehran will be careful that such actions will not undermine other national interests. Tehran's interests in improving ties to the GCC states and its knowledge that efforts to stir up the Shia in the Arab Gulf states would wreck any rapprochement have apparently caused Tehran to back off support for Shia or Sunni dissidents in the Gulf. In both Pakistan and Turkey, however, Iran has continued to support fundamentalist groups without severely damaging its state-to-state

Iran's Foreign Policy Guiding Principles

ed to be

Iran's major foreign policy goal is toore stable regional environment conducive to Iraaiaaand economic development. Tehraneeking to expand its diplomatic relations both in the region and globallyeans of and reclaiming tbe roleegional power. Foreign policy will still be based on principles of Donalignmeni and Iran's own "ne:ther East nor West" approach, although these concepts may need to modified in light of changed circumstances I

pparently hopes to maximize Iran'sof action. His public statements suggest that Rafsanjani perceives greater opportunity for Iran to advance itspreserve itsplaying foreign powers against each other and preventing their united action against Iran, such as international sanctions. Iranian policy will continue lo seek to exploit to Iran's benefit the political and commercial competition among foreign governments with interests in the region, although regional and global politicalthe end of the Coldlimiteffectiveness of this time-honored Iranian

tactics whfii

C 1

Iran is gradually adopting more conventional policies that emphasize pursuit of practical state interests over ideology. Rafsanjani, and,esser extent,recognise thai [ran hasrice because of its confrontational, dogmatic policies, and they are seeking to repair the damage. One important goal will be to persuade the internalionaltheIran is onceesponsible country, or, as Foreign Minister V'eUyatt stressed to Italian officials last year, that "Iranerioushis apparent flexibility does not necessarilyenign Tran; it wjiJ be more sensitive io its image and lo the costs of its violent behavior but will


continue io use violent or intimidating tactics when it believes they advance Iranian interests.!

Less liktlyMore Dangerous Iran

Estimate's judgment that Iran will notthreaten VS interests over the next two years is based on the following assumptions:

The strategic importance of Iran has beenby the end of the Cold War and the decline of Soviet power.

The Rafsanjani-Khamenei alliance is growing stronger domestically, and it believes Iranian interests are better served by more conventional behavior and better relations with the West.

The grave weakness of the Iranian economy, coupled with the limited capabilities of Iran's armed forces, ensure thai for the next two years Iran will not be capable oferroristVS

Iran is further deterred from belligerentby the repercussions of Desert Storm and Iran's perception that the United States would take stcang measures against aggression in the region^L

A more dangerous Iran, however, afand aggressiveness, particularly if sheenvironment is conducive, by suchas: '

A collapse of the balance of power in the Gulf through chaos In Iraq.

Serious unrest in the smaller Gulf states. Emergenceore radical regime in Tehran.

In such circumstances:

Tehran might be tempted to intervene tohia government in Baghdad, to "protect"the Shia holy sites in southern Iraq, and to bully the GCC slates. Even if Iraq does not fall into disorder, Iran's efforts to stimulate andhia insurgtncy in Iraq could lead it to take more aggressive actions towardlikely covert action as in March-Aprilmight, throughleadroader clash with Iraq.

Iran could meddle in the small Gulf stales.In Bahrain or Kuwait is possible. Making claims to Qatari oilfields is also an Iranian objectiveore aggressive government mlghtjmrsue.

Iran could pressure the small Gulf countries to end their bilateral security agreements wtiH the VnitedStates,;

Iran could expand its involvement in Lebanon, directly or through surrogates, thusole in Ihe peace process arena.

Iron could become more aggressive in pressing its demands in OftECfor higher oil prices,

A more radical government would be likely to engage in terrorism against VS and Western targe's and to encourage the violent export ofK


Iran might also become more aggressive in Central Asia and the Caucasus if its relations with Soviet central authority attenuate so-much that it no longer feels constrained by the need lo maintain good ties io Moscow. In particular, the emergenceizable and viable Islamist movement in one or more of the former Soviet republics-might prompt Iran to more active support of Islamic revolutionary activities in the former Soviet Union. Alternatively, theof outright hostile governments in the former Sovietif they maintained close relations with Ankara orbea threat in Tehran and provoke act! efforts to undermine the new governments

Persian Coif

Iran seeks recognition as the dominant power in the Persian Gulf. We believe Iran views the outcome of1 Gulf waret plus and, in particular, as an opportunity to regain what it regards as itsposition of preeminence in the region. Iraq's invasion of Kuwait shattered the Arab solidarity with Baghdad that bad isolated Iran in the region, and tbe destruction of much of Iraq's miliury machine in Operation Desert Storm ended Baghdad's strategic ascendancy in tbe Persian Gulf. On the other hand, the rise in US presence, influence, and prestige in the regionesult of the war will deter Iran from pursuing its ambitions

Tehran will take advantage of the decline of Iraq to expand its relations in the area. Rafsanjani-probably accepts that he cannot in the short term reverse Washington's enhanced influence, and he will try to limit it. Iran will seek to shape postwar relations in the Gulf in ways that emphasize Iranian leadership, isolate Iraq, prevent the reemergence of an Arab bloc directed against Iran, and limit tbe role of the Uniied States in regional security. Iran's diplomatic strategy will probably follow the general lines sketched by Rafsanjaniublic sermon inn which he presented Iranian views of regional security. The main points included:

Fostering regional unity in the Persian Gulf based On Islam and shared interests in stability anddevelopment.

cooperation among Gulf countries inoilpeaceful resolution of disputes, and noninterference inaffairs.

to any effort byegional country or :he United Slaws to impose hegemony on ta; region, although Iran, as the "focal point of the region and standard bearer of Jjlatiul' clearly would

' be the leading regional powerlj

To date, Iran's postwar efforts with GCC siates have borne some fruit. The GCC has been more receptive lhan before Iraq's defeat to engage in dialogue with

Iran, although it prefers to keep security matters last on the agenda. Oman and the emirate Dubayy appear more open lhan other GCC states to including Iran in future Gulf security relations.^'

Saudi Arabia. Key to the success of Iran's efforts to shape postwar Gulf relations in its favor wiii be the fosteringonstructive relationship with Saudi Arabia. Tehran's diplomatic efforts since Augustthe peaceful participation of moreOO Iranian pilgrims inuggest it is seriously pursuingelationship. Foreign Minister Velayati has declared the new Iranian-Saudistrategicnd Tehran has made efforts to consult^t'a Riyadh on both oil and regional polic

The Iranian-Saudi rapprochement will remain fragile, however. Iran and Saudi Arabia arc still rivals for religious and political influence in the Muslimclergy in both countriesutual disdain for each other as schismati


truggle io influence

the succession in Iraq, should Saddam Kusayn fall, or the eruption of serious unrest among the Saudi Shia minority also might revive Iranian-Saudi enmity and confrontation. In the longer term, if Iran successfully rebuilds its power, Saudi Arabiajyiil view [ran as an even more serious threat!

hag. Iran's relations with its rival Iraq arc likely to remain strained.onsequence cf the sharp reduction of Iraqi military power andhe Guif, Tehran willore assertive policy toward Baghdad,emand forwar reparations. Iran hopes iriat implements-:ion of UN Security Councilill result in Iraq's being branded the aggressor, thus providing the legal basis for reparations claims. The resolution would also formalize concessions Saddam made in Augustthe evacuation of Iranian territory, the repatriation of Iranian prisoners, and the

C,M< cow co

division of the Shan al-Arab according to5 Algiers accord. Iran is noi likely to return soon Iraq's military aircraft, grimed safehaven tn Iran during the Gulf war. '

In particular. Iran has taken advantage of Iraq's postwar weakness to attempt to resubordinate Iraqon in tbe regional pecking order, while supping short of measures that wc': threaten Iraq'sintegrity- Tehran is workiag to oust Saddam Hu-sayn from power, in bopes of replacing himeaker government more susceptible to IranianIdeally. Tehran would like tohia-dominated regime take power in Baghdad, but.that any successor regime will be weaker and more pliable than Saddam, Tehran probably wouid recognize almost anyone who could seize power in


Tehran will also continue toardline position in support of UN sanctions on Iraq.^ *J|

Rafsanjani andindeed, mostnot want to re-ignite ihe Iran-Iraq war or dismember Iraq. Iran demonstrated its restraint when, during the Shia revolt in Iraq, it limited its public response io Saddam's destruction cf Shia shrines and the arrest of Grand Ayatoliah Khu'i to diplomatic and religious protests. Such restrain! may weil also reflect Iran's sense of the limits of its power. Concern about the "Lebanonization" ofthe implications for Iran's owncertainly will ensure thai Tehran will noi promote the founding of an independent Sbia or Kurdish stale on Iraqi ler.-isoiy.', ' '

Non-Gulf Arabs

Iran has few viiai interests in the broader Arab worid ant is likely io continue its general efforlSxpand its influence with Arab states Outside the Gulf.the Gulf crisis, Iran restored or improved its diplomatic relations with several Arab states,the GCC. but also Jordan, Tunisia, and Egypt. Iranian policy in the broader Arab world is likely io

stress-Muslim solidarity and-islamic principles. Iran also will try to gain influence with localalthough it will try to avoid damaging their relations with Arab governments in the process

^Tehran's ideologicalto Israel, its willingness to champicn thecause,erception that Israel,S ally,eostrategic threat to Iran all serve to reinforce Iran's hardline oppositionegotiated peace with Israel and support for radical Palestinians. We believe Iran will take active measuresjoIsraeli-Palestinian reconciliation, including US-supported peace efforts..'.

Lebanon. Tehran will seek to maintain influence iny

Pakistan. Iran's relations with Pakistan will deepen over tbe next two years. Iran sees Pakistan as another useful non-Arab source of support in the region, while Pakistan looks touslim power capable of helping PaJtistan resist Indian pressure. Iran also shares an interest in helping the Afghan resistance gain political power in Kabul, although this hasource of division each tide tends to aggressively advance the interests of its clients ir. the resistance to (he exclusion of the others. Political relations are likely to be relatively cordial in the next few years, and both countries will look for ways totrade and econcmic cooperation, bothand within the framework of the ECO.Tehran's perception that Pakistan does notprotect Pakistani Sh:as*ill continue to bent In their relations

Cooperation between Iran and Pakistan is likely to growhe field of defease matters because both sides rind such cooperation valuable and each has

Syria. Iran will be especially keenetain strong ties io Syria, which hai long been its closest ally in the Arab world aad which shares Iran's antipathy for Saddam's regime in Baghdad. Tehran has exhibited this interest in its close consultations with thensiled Tehran innd Rafsanjani visited Damascus in earlyin its willingness, albeit borne is part by necessity, to defer to Syrian wishes in Lebanon. But Syria's efforts tocloser to tbe West, its rote in the postwar GCC-Plus Two Damascus accords, its announced willingness to participate in aa Arab-Israeli peace conference, and its support for the reconsiitution of (he Lebanese state under the Ta'lf accords will erode relauoosuccessful negotiatedbetween Syria and Israel, or Iranian success inilitant Islamic government in Iraq, woulderious, perhaps fatal, blow to Syrian-Iranian relations, while thebreakdown in Arab-Israeli peace efforts or Saddam's retention ofserve to keep Iran's ties to Syria strong ^ ^

Refatwoa With Turkey, Pakistan, Afcbanistan. Toe Northern Tier

In the eocthera tier. Iran has tried toeb of relations to prevent its isolation from the region and the outside world, to limit access to Iran by Iranian dissidents in exile, and to gain regional support to balance ihe potential emergence of an Arab bloc directed against Iran. In particular, Tehran hason the Economic Cooperation Organisationtrilateral body formed1 andof Turkey. Iran, anda vehicle for expanding cooperation among the northern tier states Although the collapse of both Iraqi power and Arab solidarity has reduced the immediate need for braad trilateral cooperation, Tehran is advocating that the ECO broaden its charter from strictly economicto facilitate trilateral cooperation on political and security issues. This is likely toontinuing theme in Iranian regional relations, independent of Iranian efforts toore cooperativewith the Arab Gulf states'

something to offer the other Military consultations theie successes. He has increased"diplomaticincreased steadilynd comma .idem commercial exchanges with the major Europeanworking-level delegations have exchanged infor- ers, most notably France and Germany, but alsolion during frequent isiis Islamabad wants com- July and the United Kingdom. Tehrin alsofrom Tehrin for ammunition, fuel, and the resumed relations with London inf its eastern airfields and port facilitiespave the way for the lifting of the European

safehaven in the eventar with India. It also Community's ban on high-level contacts withIran will agree to joint defense production and and, since then. Foreign Minister Veuyati hasshare chemical warfare techaototy. Tehran values the major EC capitals and several EC ministerssecurity ties to Pakistan and visited Tehran. Relations with Japan have alsowill ultimately lead Islamabad to share proved, with Tokyo likely to invest in somenuclear weapons ind missile technology. Iran could development projects. Trade with Westernbenefit from Pakistan's experience in overhauling Japan, and China jumped someercent last yearequipment and sees Pakisti-onduit for aboutillion. Germany. Japan. Italy,embargoed Western military spares and France also have recently expanded theirdespite Islamabad's assurances to Wash- term creditthat it will not permit such transfers.

1 succession of Pakistani Army chief Beg Tehran is especially interested in the Europeansan officer less enthusiastic about close relations the Japanese as sources of financingthe IRGC will probably slow the pace of defense technology. The Iranian leadership probably viewsduring the time frame of this Estimate, EC countries and Japan as less likely than theit will nothalt the general trend toward closer States to try to exploit diplomatic or economictiesP to undermine the regime or to link commercial

to changes in Iranian behavior. The West

Afghanistan. Tehran's policy toward Afghanistan will Europeans and the Japanese also may uke onon securing the establishmenttable Islam- political importance to Iran as Soviel powergovernment in Kabul lhattrong voice declines and Tehran locks for new partners to serveAfghan Shias and thai miaimixes US, Saudi, and o US influence. Tehran hasinfluence. Tehran has already identified France as one power that might uselimiiedunify the Shia resistance diplomatic and economic influence to counterunder iu tutelage, In July and ington, and from lime to lime Germany, Japan, orattempted lo work with Pakistan to influence the European Community are also touted for that roseand Sunni Afghan resistance to consider ihe UN the IranianGeneral's proposal for establishing a "

fire and interim administration in Afghamsun lead- Iran is atsc turning io China for support in opposing ing io elections.ew government comes to US primacy in the world Tehrin hosted Premier Li power in Kabul. Tehran is likely to work hard to build Peng in early July andoint communique that relations with the new regime, providing such aid as it stressed common opposition to "one or anothertoken offers of Iranianand power" dominating the new international political looking to the Shia as an avenue of tnftacnceP ^ order.imilarehran newspaper stressed

nw ihc "decisive" role China,ermanent memberOui lo the EuropeanUN Security Council, couldplayjn support of

Japan, andoppressed nations' rights.'P T

During the pan two years, Rifsanjani tas *W

ly improved relations wiia Western Europe, Japan, and China, and he will want to preserve and build on

Iran and the Soviei Union: Uncertain Future

The dissolution of ihe Soviet Union will pose one of the most difficult problems for Iranian foreign policy during the next two years Rafsanjani has invested heavily in improving relations wiih the Soviet Union and essentially has lookedoscow for Iran's main source of modern military equipment,artner in resisting US influence in the Middle East, and for the main route for increased gautports to Europe. At ihj* same lime, press

that Tehran's main efforts at

relations with the republics has been aimed at cultivating the nonrcformist leaders there, who may not long remain in power. Rafsaojani, for example, was hosting Azerbaijan's hardline President Mutali-bov in Tehran when the abortive coup occurred in August. Iran will have toolicy that preserves its interests in gaining influence in the republics without damaging its potential ties to the central government.^"

Tehran is likely to focus on four main goals in its policy toward the Soviet Union. It will seek to:

(he arms relationship Tehran has made the strategic decision to rebuild its military strength, especially its air force and air defense, with primarily Soviet equipment. It will seek to ensure that thea shrunken centra! governmenttronger Russian Republicto provide equipment and spares to Iran, although they will seek to avoid complete dependence on the USSR.

stability in Central Asia and theEven before the Soviet coup, the Iranians hadreat deal of concern Over the potential for unrest in the Muslim republics, even to the point of Rafsanjani quietly urging the center to keep order there. Tehran will be especially concerned to limit the chances that, as in Yugoslavia, ethnic rivalries will lead lo civil war. whichinimum could threaten an already overburdened Iran til currently hosts moreillion Afghan and Iraqi refugees)ew wave of Azeri or Central Asian refugees. Iran will also be concerned that

nationalist unrest in the Soviet southern republics might inspire similar separatism among Iranian ethnicthe roughlyil. lion Iranianstimulate popular demands for democratization in Tehran. Because Tehran's tics to the republics are primarily with the existing elites and the pro-Rafsanjani Tehran Times has stated that Iran opposes some of the 'extremist nationalistic movements" in the Soviet Union. Iran probably will encourage the current republic gov-emments to remain in power, maintain domestic order, and possibly to retains to the center. Tehran sees such lies as preferable to theincreased Western, Saudi, or Turkish influence.

Expand Iranian influence. Iran will seek .to ensure that friendly governments emerge in thc-six Muslim republics of the former Soviet Union, but we judge that'it will have little influence over the process. Iran will probably concentrate on government-to-govcrnment and trade ties initially, particularly in Central Asia. Indeed,eek of tht Soviet coup, the Tehran Times suggested that the leaders of the Soviet Muslim republics should meet in Tehran to discuss coordinating the republics'to tbe breakup of the Union. Iranians will increase their involvementide variety of religious activities. Tehran may try to expand ties to radical Islamic elements in the Muslim republics as another avenue of influence, especially if Tehran perceives any new republic leadership to beThe competition for the hearts and minds of Soviet Muslims is likely to bexpect Iran to be the least able to compete: modem nationalists in the Soviet Muslim republics are likely to be more attracted io Turkey's secular, democratic system, while most traditionalof those in Shiaprobably look more favorably on the moreThere is littlenformation, but Iran's informal or clandestinein the Soviet republics are probably net well developed.

have complicated Iran's efforts at reconstruction. Reversing such efforts is Rafiaaiani's mainis tbe United States, but it would require aof Iranian support for terrorism Tehran, for iu part, will continue to press for the return of miliury property and funds, often referred to genericatly by Iran as "frozenhich are the subject of claims at the Iran-US Claims Tribunal at The Hague, as the price for improved relations with the United States^

Despite Rafsan;ani's apparent support for better ties, he has notonsensus for itthe regime. His hardline opposition is unalterably and vocally opposed to any retreat from confrontation with the United Sutes, and. although iteclining force in Iranian politics, its criticism forces Rafsanjani to be cautious. Rafsanjani will be careful not te Iran's self-appointed role as the leaderhe Islamic resistance to (he West and will remain suspicious of US intentions toward bis clerical regime. Mostof the mainstream clergy do not endorserelations with the United Sutes, preferringthat Iran look to Western Europe and Japan for financial and economic*%

Because of these constraints, Rafsanjani is likely to move slowly and prudently to repair relations. He demonstrated this caution in two areas in which there is high US interest:

The Gulf war Although Iran clearly could not join the coalition against Iraqilitary sense, il cculd have deneSyriaseize the opportunity presented by the crisis to emphasize

jreas of common interest with the United Suit

Tebra'n focused jis effoVi

cn courting the Gulf states and Europe, while condemning US actions On occasion. Iran was even obstructive, criticizing Turkey for allowing the US Air Force to suge combat missions out of Ineorlik and attempting to preempt the SUrt of the ground warast-minute peace initiative.

hostages in Lebanon:

The Iranian paper Jomhuri-ye Estami, which often reflects the views of the Majlesargued that holding hostages is an effective way to block US efforts toew order in the Middle East and suggested prolonging the crisis into the US presidential election. Rafsanjani almost certainly wants to resolve the hostage issue, but his negotiating tactics do not suggest (hat he thinks he needs to end (he problem quickly. Should, as is most likely, all Western hostages be freed. Tehran's expectations would increasepeedier resolution of the "frozen assets"

Rafsanjani will probably try to hew to his incremental strategy toward the United States despite theof the Soviet empire. Nonetheless, the collapse of Soviet power may force Tehran to reevaluate and adjust the pace of its policy toward the United States. Whatever (he pace and scope of Iran's opening to the West, US and Iranian interests will continue to clash. The most likely points of friction include:

Regional security. The Iranian regime regards the reduction of US influence in the Middle East to be in its national interest as well as ideologically

desirable. Tehran wilt try to minimize USin regional security and will view any bilateral

security accords between the United States and

GCC states as directed against Iran.

' Regional disarmament. Tehran is deeply skeptical of US disarmament proposals, believing that they are skewed in favor of Israel and aimed at keeping the Muslim countriesosition of inferiority. Tehran is likely to oppose US efforts towarddisarmament, although it may be morewirh the UN, which it feels is less likely toro-US and pro-Israel agenda.

The "new worldranian political rhetoric and press commentary across the spectrum exhibit considerable anxiety regarding the emergence of the

United States as (he only <riie-Superpower. Tehran regards with suspicion US efforts to shape the global order, fearing (hey are simplyS bid for world hegemony. Iran's effortsobilize Third World and especially Muslim resistance to US policy are largely quixotic, but ihey suggest Tehran williplomatic nuisance in multilateral and regional forums.

The Arab-Israeli peace process. Tehran remains rigidly opposed to peace with IsraellT-

^Iran's dispatch of envoys to the ab states to urge Muslim defense of Palestinian rights, its growing support of radical Palestinianarked rise in Hizballah attacks on the Israeli security zone in Soulh Lebanon, andalestinian conference in1 all Suggestjhat_ Iran's opposition is more than rhetorical

Terrorism. Iraniaiignificant ingtonf '

The clerical regime in Tehran is also likely to oppose Washington over issues in which US and Iranian ideology, culture, and political style clash:

support for terrorism willdividing Tehran and Wasb-


JTehran is unlikely to conduct terrorism directly against US or Western inters: during the nex( (wo years, but it is supporting radical gioups F ". "


'JTehran is willing to

nsor anti-Israeli auacks'oy Hizballah andPalestinian groups in hopes of disrupting :he peace process.

Moreover, there willontinuing danger that external events could be perceived in Tehran as unforgivable insults that must be avenged, much as the publication of The Satanicattacks on bookstores and translatorsT

Human rights. Tehran portrays US efforts to hold the regime accountable for human rights abuses in IranS attempt to blacken Iran's name and jnaimain its isolation. Under Rafsanjani, Iran has worked diligently to end UN efforts to monitor human rights abuses in Iran and to reject Western criticismisundmunding of Islamic culture. Tehran will continue to reject Western efforts to ease human rights abuses in Iran. Indeed, some political rights may well be further circumscribed under Rafsacjani as be moves to_ opposition and maintain domestic order^

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